International fund for oil pollution damage compensation: Supplementary Fund Protocol

Plain language summary

The 2003 Protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992, (Supplementary Fund Protocol) was adopted by the International Maritime Organization to establish an additional tier of compensation for pollution damage from ships carrying persistent oil as cargo.

Objective

The Supplementary Fund Protocol establishes an optional third tier of compensation in the form of an international compensation fund made up of contributions from receivers of oil by ship in State Parties.

Key elements

The Supplementary Fund Protocol is intended to supplement both the shipowners liability under the International Convention on Civil Liability for Oil Pollution Damage, 1992 and the compensation available from the 1992 Fund. Thus, it ensures the sharing of the financial burden between the shipowner and the cargo interests.

The Supplementary Fund Protocol creates a separate supplementary fund part of the International Oil Pollution Compensation Funds and sets out the governance of the Fund. It also sets out the obligations for reports and contributions to be made annually to the Fund.

The total amount of compensation for a single incident is 750 million Special Drawing Rights, including the shipowners’ liability and the amount available under the 1992 Fund.

Expected results

This Supplementary Fund Protocol ensures significantly higher compensation is made available for those who suffer losses or damage from oil pollution from tankers.

Canada’s involvement

Maritime shipping is an important part of trade and the Canadian economy. Through international agreements, Canada can ensure losses and damage from oil pollution are covered.

On June 23, 2009, amendments to the Marine Liability Act received Royal Asset and implemented the Supplementary Fund Protocol in Canada. Subsequently, on October 2, 2009, Canada ratified the Protocol.

As a Member State, Canada is involved with the Supplementary Fund, including taking part in the Supplementary Fund Assembly. Assemblies are held at least once a year.

Results / progress

Activities

Canada has been a Member State of the International Oil Pollution Compensation Funds since 1989. Canada actively works with the Funds and other Member States on the development and administration of the international compensation regime. This includes ensuring that Canada’s obligations of reporting contributing oil to the Funds is collected and any contributions are paid by Canada’s domestic fund, the Ship-source Oil Pollution Fund.

Reports

Information on Canada’s contributions can be found on the International Oil Pollution Compensation Funds’ Oil Reporting and Contributions page.

The International Oil Pollution Compensation Funds issues an annual report (PDF).

Results

The results of being party to the Supplementary Fund Protocol is that Canada promotes global uniformity and ensures that a compensation regime is in place for ships carrying oil as cargo in its waters.